BFreshour
139 posts
msg #38480
- Ignore BFreshour |
10/16/2005 8:19:05 PM
Hi, just signed up for the site. Was hoping to get comments on my filter. In addition, I'd like some clarification on 'wait for green'. Sometimes a stocks high will be above the previous days high before the RSI2 filter fails and it comes crashing down. Any advice on learning to avoid these problems?
rsi(2) below 1
rsi(3) below 5
close 3 days ago below open 3 days ago
close 2 days ago below open 2 days ago
close 1 day ago below open 1 day ago
volume gained more than 50 percent over the last 5 days
average volume above 250000
close above 1
stochastic %D(15,5,3) below 10
stochastic %K(15,5,3) below 5
stock is optionable
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TheRumpledOne
6,411 posts
msg #38490
- Ignore TheRumpledOne |
10/18/2005 12:58:45 AM
What part of WAIT FOR GREEN don't you understand?
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BFreshour
139 posts
msg #38494
- Ignore BFreshour |
10/18/2005 8:24:10 AM
The part where the 'WAIT FOR GREEN' trait is exhibited in a stock only to have it plummet. Should the RSI(2) indicator (along with WAIT FOR GREEN) be more of a scalp than a 1-3 day swing? I know that other indicators should be used in conjunction, but I'm interested in limiting downside risk through money management, knowing my 'outs', etc...
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TheRumpledOne
6,411 posts
msg #38495
- Ignore TheRumpledOne |
10/18/2005 8:30:39 AM
Look at QQQQ on a 3mon/Daily www.prophet.net chart.
Use rsi(2).
Study the chart.
Tell me what you see when rsi(2) < 10.
The problem traders have is they expect their filters and strategies to work on just about every stock in the universe. The fact is some stocks are just going down, down, down and are not really "tradeable".
Learn to identify and trade good, strong stocks that move up AND down with volume.
MAY ALL YOUR FILLS BE COMPLETE.
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roca1018
163 posts
msg #38516
- Ignore roca1018 |
10/20/2005 6:45:32 AM
There are certain low priced tech stocks that can jump over 15% when they move
below RSI(2). I am not implying that they move the day after crossing below RSI(2)
as sometimes they are 1 or 2 day muddy failures. IMHO you have to be careful with
a low priced under RSI(2) stock if there is any news that hints at an impending bankruptcy, witness the recent plunge of DPH.
Regards,
Rich
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alf44
2,025 posts
msg #38518
- Ignore alf44 |
10/20/2005 12:56:32 PM
Seems to me...
...that alot of the "RSI(2) - Wait For Green" confusion could be avoided by using a simple "Thrust Entry Method."
Just a thought.
Regards,
alf44
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BFreshour
139 posts
msg #38519
- Ignore BFreshour |
10/20/2005 1:21:47 PM
Thrust entry sounds sexual... ;) Care to explain?
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alf44
2,025 posts
msg #38520
- Ignore alf44 |
10/20/2005 2:23:40 PM
BFreshour,
The "Trust Entry Method" is meant to get you INTO a stock that is either...
"Oversold" in an UPTREND (and therefore go LONG)...
or...
"Overbought" in a DOWNTREND (and therefore go SHORT) !
----------------------
It always helps (actually it's a must) to know what the existing TREND is for a particular stock before you EVER consider a trade in that stock. There HAS to be a context. There HAS to be a framework from which to make trading decisions. That "context"...that "framework" is the TREND ! Specifically, the direction of TREND !
So...assuming you determine that the TREND is UP...and RSI(2) - (since that IS the topic of this thread) - is below 10...5...1...or, whatever...you now have a "context from which to make a trading decision." The context is a "short-term OVERSOLD condition" (as is indicated by RSI(2))...within an existing "longer-term UPTREND" (based on MAs or whatever).
----------------------
With all that in mind:
Thrust entry for LONGS:
If you are wanting to enter LONG because the trend is UP, wait for a down day in which the High is lower than the previous day's High and the Low is lower than the previous day's Low. When this happens, place a Buy Stop just over the High of the down day and use that to take you into the trade.
THIS ORDER IS GOOD ONLY FOR THE NEXT DAY !
Thrust entry for SHORTS:
If you are wanting to enter SHORT because the trend is DOWN, wait for an up day in which the High is higher than the previous day's High and the Low is higher than the previous day's Low. Place a Sell Stop just under the Low of the up day and use that to take you into the trade.
Again...THIS ORDER IS GOOD ONLY FOR THE NEXT DAY !
----------------------
That's it !
Nothing fancy...not perfect...but, an entry method that (to me at least) is not as vague or nebulus as the so called "wait for green" terminology that everyone seems to have questions about.
It seems alot of people here just expect that an RSI(2) below 10/5/1 is a pending BUY signal...without any regard for the existing longer-term TREND. Then they seem suprised when the stock plummets further...when the TREND is obviously DOWN.
There HAS to be a "context" from which trade.
TREND...TRADE the TREND !
Anyway, hope this helps!
Regards,
alf44
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alf44
2,025 posts
msg #38521
- Ignore alf44 |
10/20/2005 3:42:06 PM
...that should've read...
There HAS to be a "context" from which "to" trade.
alf44
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TheRumpledOne
6,411 posts
msg #38529
- Ignore TheRumpledOne |
10/21/2005 1:23:45 AM
"Nothing fancy...not perfect...but, an entry method that (to me at least) is not as vague or nebulus as the so called "wait for green" terminology that everyone seems to have questions about. "
There is nothing VAGUE about wait for green.
If the price of the stock holds above the previous close then it is green. What could be simpler?
I agree with what you said about the trend... if you buy a rsi(2) < 1 stock that is in a down trend, like OSIP now, you must be prepared to scalp out with a tiny profit until the stock shows it is reversing which a close above a flat or rising ema(5) would indicate.
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